The founding father of Decentralized finance (DeFi) protocol dYdX, Antonio Juliano, took to X (previously Twitter) to share the findings of the investigation into the lack of $9 million in insurance coverage funds on Nov. 17 in what many suspected was an exit rip-off.
Juliano famous that the dYdX chain wasn’t compromised, and the insurance coverage claims of $9 million occurred on the v3 chain. The v3 insurance coverage fund was used to fill gaps in liquidation processes within the Yearn.finance (YFI) token market.
The protocol co-founder additionally pressured that dYdX has no plans to barter with the exploiters behind the assault and can as an alternative pay bounties to these most useful in aiding the investigation:
“We won’t pay bounties to, or negotiate with the attacker. We and others have made vital progress into figuring out the attacker. We’re within the strategy of reporting the knowledge now we have to the FBI.”
Juliano added that the exploited v3 chain has central parts that may very well be answerable for the compromise. The safety incident precipitated the YFI token to drop by 43% on Nov. 17. The sudden value crash raised considerations throughout the crypto group a few attainable exit rip-off.
To be very clear: the current insurance coverage fund incident on dYdX was on v3 and never the dYdX Chain
v3 has central parts, dYdX Chain doesn’t. We assist to function v3, we don’t assist to function dYdX Chain. That is necessary to know why now we have taken the actions now we have
— Antonio | dYdX (@AntonioMJuliano) November 20, 2023
The exploit focused lengthy positions in YFI tokens on the change, liquidating practically $38 million of positions. This was one of many key catalysts behind the value drop of the YFI token. The trade-in query worn out over $300 million in market capitalization from the YFI token, additional fueling the insider job idea.
Safety breaches in DeFi are nothing new; nevertheless, dYdX has taken a novel path by specializing in discovering the wrongdoer utilizing the group fairly than paying a direct bounty to the exploiter.